Accouting part 1

Sunk Cost

A cost that will not be affected by later decisions is termed

oppotunity cost

Heston and Burton, CPA's, currently work a five-day week. They estimate that net income for the firm would increase by $75,000 annually if they worked an additional day each month. The cost associated with the decision to continue the practice of a five-day work week is an example of a(n)

Which of the following would be considered a sunk cost?

net book value of equipment that has no market value

Discontinuing a product or segment is a huge decision that must be carefully analyzed. Which of the following would be a valid reason not to discontinue an operation?

variable costs are less than revenues

All of the following should be considered in a make-or-buy decision except

whether the supplier will make a profit that would no longer belong to the business

Which of the following reasons would cause a company to reject an offer to accept business at a special price?

The additional sales will increase fixed expenses.

opportunity cost

The amount of income that would result from an alternative use of cash is called:

differential cost

The amount of increase or decrease in cost that is expected from a particular course of action as compared with an alternative is

differential revenue

The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is